Car Conundrum, Suggestions welcome

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Alienwho

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Apr 22, 2001
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My brother made an extremely stupid decision a few years ago thanks to him being a pushover and his ex wife being a stupid bitch. He bought a 2009 Subaru Legacy 2.5i for way to much money when he can't afford it at all.

He has finally woken up to the situation and is changing his ways and I'm thinking of helping him out. The Legacy has 55,000 miles. I'm not sure on the trim specifics. He owes just over $16,000 on the car and by my estimates on autotrader it's worth about $15,000 (does this sound right?). He's been paying almost $400/month payment for years and still has like 3 years left. He's a college student and will never be able to save any money up between this stupid payment and child support.

My wife has a 2006 Elantra worth about $5,000. I hate driving the car and hate that it has no safety features for my family.

We're thinking of doing a trade. A situation I'm thinking of his I'll pay of his car and buy it off him, he'll take out a new loan for $6000 and buy the Elantra off me. This seems like a win win, I get a much better vehicle for paying about $11,000 out of pocket and his debt is cut by almost 1/3 and he still has a completely reliable car to drive around that fits his budget.

Any suggestions or criticisms with this idea? How do private party vehicle purchases work dealing with paying taxes and stuff?
 
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EagleKeeper

Discussion Club Moderator<br>Elite Member
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Oct 30, 2000
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1) Can he get the loan?
a) Before the switch
b) After the item is removed from his credit as an existing loan

2) If the bill of sale has an attachment to it, indicating that the sale is to a relative (identify); usually the sales tax is waived. when the vehicle is re-registered.

YMMV by state.
 
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